Virgin Media O2 has reportedly made a £3 billion opening offer for rival TalkTalk as it seeks to diversify its portfolio and expands its customer base.
Sky News says talks between the two parties are at an early stage and are being held on a non-exclusive basis but could spark a bidding war for TalkTalk, which is believed to have received informal approaches from multiple parties over the past few months.
These include Vodafone and Sky, both of which would view TalkTalk’s 4.2 million customers as a significant opportunity to expand their fixed line install base and an opportunity to cross-sell services and increase average revenue per user (ARPU).
TalkTalk takeover
In Virgin Media O2’s case, TalkTalk’s user base would allow it to scale even further as it seeks to become a genuine converged challenger to BT, while also providing it with an opportunity to reach a wider market.
While Virgin Media O2’s pay-television and gigabit broadband services are positioned as premium products, TalkTalk has re-established itself as a ‘no-frills’ challenger brand.
It has streamlined to focus on its core broadband business and the shift from copper to fibre rather than offering converged services.
In 2020, the company was taken private by founder Sir Charles Dunstone and investment firm Toscafund in a £1.1 billion transaction that valued the company at around £1.8 billion.
Virgin Media would hope to either upsell TalkTalk’s existing customers to more lucrative packages of broadband, television and mobile services and use the brand to offer cheaper connectivity bundles without damaging the prestige of its main offering.
Virgin Media O2 declined to comment to TechRadar Pro.
Via Sky News
